Gabriel v. Windsor, Inc.

Citation843 N.E.2d 29
Decision Date28 February 2006
Docket NumberNo. 02A03-0504-CV-148.,02A03-0504-CV-148.
PartiesRita Ann GABRIEL, Appellant-Plaintiff, v. WINDSOR, INC., Appellee-Defendant.
CourtCourt of Appeals of Indiana

James A. Federoff, Jason M. Kuchmay, Federoff Law Firm, Fort Wayne, for Appellant.

Stephen H. Trexler, Clifford A. Holleran, Trevor J. Hobbs, Holleran & Trexler, Fort Wayne, for Appellee.

OPINION

SHARPNACK, Judge.

Rita Ann Gabriel appeals the trial court's judgment in favor of Windsor, Inc. ("Windsor"). Gabriel raises four issues, which we consolidate and restate as:

I. Whether the trial court's judgment in favor of Windsor and denying Gabriel's counterclaim is clearly erroneous;

II. Whether the trial court's judgment granting specific performance is clearly erroneous; and

III. Whether the trial court's judgment in favor of Windsor in the amount of $2,383.41 is clearly erroneous.

Additionally, Windsor raises one issue, which we restate as whether Winsdor is entitled to receive appellate attorney fees due to Gabriel's procedural bad faith. We affirm in part, reverse in part, and remand.

The relevant facts follow. This litigation involves a dispute between Gabriel and Windsor concerning Windsor's construction of a residence for Gabriel. In October 2002, Gabriel entered into a contract to purchase Lot 5 in the Villas of LaCabreah and developed her house plans with her own architect. Windsor is the exclusive builder in the development.

Construction of the residence began in late November 2002. In the Spring of 2003, disputes about various things arose between the parties, including: (1) a leak in the basement; (2) the placement of a retaining wall; (3) the omission of a closet on the second floor; (4) the failure to install a heater in the garage; (5) discoloration of the concrete on the front porch; and (6) incorrect size and placement of the back patio and sidewalk. Beginning in June 2003, Gabriel was represented by counsel during negotiations with Windsor. As a result of the negotiations, Windsor agreed to repair the basement leak and provide a written warranty, construct a retaining wall between Lot 5 and Lot 4, remove and replace the sidewalk and patio, add a concrete step to the patio, replace the garage heater, and replace insulation in the basement. Windsor also agreed to put a colored sealer on the front porch concrete and fix the closet issue.

On June 23, 2003, Gabriel, through her attorney, sent a letter to Windsor as follows:

As a follow up to our telephone conversation of last week, this letter is notice that Rita Gabriel desires to terminate the agreement dated October 30, 2002, for the purchase of Lot 5 in The Villas of LaCabreah. The reason for the termination is that the residential structure cannot be completed in a good workmanlike manner to the standard within the industry, to wit:

1. Water continues to leak into the basement even though attempts to correct this problem have been undertaken by you.

2. The basement leaking problem is exacerbated by the surface water and roof downspout water flowing from Lot 4 onto Lot 5. Because of the difference in height between these two lots and the small lot sizes, this drainage problem cannot be adequately corrected.

Naturally, there are numerous ways to accomplish this termination. I am glad to discuss each option available to both parties.

Appellant's Appendix at 222.

On July 18, 2003, Windsor filed a complaint for specific performance. Windsor alleged that it had completed construction of the residence and fully performed its obligations under the contract and that Gabriel had "refused to pay the Balance Due and refused to close the sale of the Residence and the Real Estate to Gabriel." Id. at 119. Gabriel filed an answer, affirmative defenses, and counterclaim. In her affirmative defenses, Gabriel alleged, in part, that Windsor had failed to construct the residence in accordance with the contract, causing a material breach, that Gabriel properly terminated the contract, and that Windsor had breached its express warranty. The counterclaim alleged that Gabriel had been damaged by Windsor's breach of the contract and its express warranty. Windsor later amended its complaint to add a claim for breach of contract and requested damages if the trial court did not grant its request for specific performance.

After a three-day bench trial, the trial court entered the following findings of fact and conclusions thereon:

FINDINGS OF FACT

This cause was brought by Plaintiff, Windsor, Inc. ("Windsor") seeking specific performance of a contract to build a certain residence for Defendant, Rita Ann Gabriel, ("Gabriel"); or, in the alternative damages for breach of contract. Gabriel answered with affirmative defenses and a counter-claim seeking damages for breach of warranty and rescission of the contract.

This cause was tried to the Court on August 10, 11 and 12, 2004. Prior to the trial, the Court viewed the residence in question in the company of counsel for each party. At trial, Plaintiff appeared by Attorney Stephen H. Trexler, Jeffry A. Gilmore, Sr., its Chairman, and Gary W. Allen, its President. Gabriel appeared in person and by Attorney Thomas M. Gallmeyer. Evidence was presented by the parties. Plaintiff having filed a Request for Findings pursuant to Rule 52, Indiana Rules of Trial Procedure; and, the Court, having heard the evidence and reviewed the arguments of counsel as set forth in the trial briefs filed by the parties NOW FINDS:

1. The Plaintiff, Windsor, Inc. ("Windsor") is a corporation organized and doing business pursuant to the laws of the state of Indiana with offices in Allen County, Indiana.

* * * * * *

8. Gabriel holds an independent real estate broker license issued by the State of Indiana.

9. Gabriel is an MAI appraiser as designated by the Appraisal Institute and has been engaged in the business of appraising commercial and industrial real estate for several years.

10. Gabriel has considerable expertise and knowledge in real estate by reason of her professional license, designation, continuing education and professional activities.

* * * * * *

13. On July 26, 2002, Gabriel and Windsor executed a Homesite Reservation whereby Windsor agreed to reserve Lot 5 for at least 30 days, during which time it was expected the parties would develop plans and specifications for a villa and enter into a construction agreement. Gabriel was told that Windsor could build a custom designed villa.

14. Prior to Gabriel's execution of the Homesite Reservation, Windsor had been made aware that storm water was draining onto Lot 5 from the adjoining Lot No. 4 ("Lot 4"), and was pooling on Lot 5, but did not disclose that information to Gabriel.

15. Windsor constructed the residence situated upon Lot number 4 in Villas of LaCabreah, which adjoins the Real Estate.

16. Lot 4, Villas of LaCabreah is next to Lot 5, and the grade of Lot 4 is higher than Lot 5.

17. Shortly after July 26, 2002, Gabriel employed Roy McNett to prepare custom plans for a villa to be constructed upon Lot 5 ("Villa"). Gabriel furnished Windsor certain plans for the Residence as prepared by Roy McNett, a designer of homes associated with Architectural Concepts, Inc., (Joint Exhibit DD) ("McNett Plans").

* * * * * *

21. Windsor prepared a set of construction plans from the McNett Plans (Joint Exhibit EE) for review by Gabriel ("Original Layout Plans").

22. Various modifications and revisions of plans for the residence by Windsor were prepared by Windsor pursuant to various discussions between Enright and Gabriel ("Draft Plans").

23. Gabriel reviewed and approved various revisions to the Draft Plans during the discussions with Enright.

24. Cost of the Residence was a concern of Gabriel in her review and revision of the Draft Plans.

25. Gabriel was meticulous in her review of the Draft Plans for the Residence as well as in reviewing the details of the Residence as it was being constructed and frequently made comments concerning such details and various items she did not think complied with the plans and specifications for the Residence.

26. Gabriel asked Steve Enright, Windsor's representative, whether any changes had been made to the last version of the construction plans dated October 29, 2002, and upon being told that no changes had been made, Gabriel initialed the preliminary construction plans dated October 30, 2002. On the 30th day of October, 2002, Gabriel affixed her initials on Draft Plans consisting of four (4) drawings of elevations, first floor plan, second floor plan and basement floor plan for the Residence (Joint Exhibit II).

27. Gabriel either reviewed, or had adequate opportunity to review, Joint Exhibit II before she initialed it.

28. The second floor plan in Joint Exhibit II does not contain a closet as do prior Draft Plans dated October 21, 2002 (Joint Exhibit EE) and October 29, 2002 (Joint Exhibit HH).

29. Between late August, 2002, and October 29, 2002, Gabriel and representatives of Windsor had numerous meetings with regard to finalizing the plans and specifications for the Villa.

30. On or about the 30th day of October, 2002, Windsor, as Builder and Seller, and Gabriel, as Buyer, entered into a certain "Building Construction Agreement," (Joint Exhibit A) including a "LaCabreah Villa Series—New Home Proposal" (Joint Exhibit B) (collectively "Construction Agreement"), whereby Windsor was to construct and convey to Gabriel a residence ("Residence") on real estate, located in Allen County, Indiana, commonly known as 333 Foxberry Lake Run, Fort Wayne, Indiana, and more particularly described as follows:

Lot number 5 in Villas of LaCabreah, according to the plat thereof, recorded in Plat Cabinet C, page 126 and recorded as Document No. 96-56103 in the Office of the Recorder of Allen County, Indiana ("Lot 5").

31. Pursuant to the Construction Agreement, Gabriel was to pay Windsor in specified installments the sum of Two...

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